Fraud detection is a concept used in many industries including banking and financial sectors, insurance, government agencies and law enforcement, and more. Fraud attempts have seen a drastic increase in recent years, making fraud detection more important than ever.
In banking, fraud can involve using stolen credit cards, forging checks, misleading accounting practices, etc. In insurance, 25% of claims contain some form of fraud, resulting in approximately 10% of insurance payout dollars.
A new approach being used for fraud prevention and detection involves the examination of patterns in the actual data. The rationale is that unexpected patterns can be symptoms of possible fraud.